Mercury Systems Inc (NASDAQ: MRCY) is a defense electronics company that designs, develops, and manufactures processing systems, subsystems, and components for aerospace, defense, and intelligence applications. Revenue comes from contracts to deliver hardware ranging from chip-scale components to fully integrated processing subsystems, with 53% of FY2025 revenues recognized at a point in time upon shipment or service completion and 47% recognized over time as performance obligations are met. RTX Corporation was the largest customer at 13% of total net revenues in FY2025, followed by Lockheed Martin and the U.S. Navy each at 10%. The company positions itself as a supplier of commercially derived electronics adapted for defense use, covering C4I systems, sensors, and electronic warfare, serving prime defense contractors and the U.S. government rather than competing directly with large defense primes. Net loss for FY2025 was $37.9 million, an improvement from a $137.6 million net loss in FY2024. The company is headquartered in Andover, Massachusetts, with facilities across the United States and international operations supplied through a contract manufacturing agreement with Cicor Group signed April 2025.

Revenue model

Contract-based revenue from delivering defense electronics hardware and services. In FY2025 (fiscal year ended June 27, 2025), 53% of revenues were recognized at a point in time upon delivery of components, modules, sub-assemblies, or integrated subsystems, and 47% were recognized over time under long-term development and production contracts. Contracts include firm fixed price and cost-reimbursement structures.

Products and services

Processing subsystems, RF and microwave components, digital signal processing products, rugged avionics and electronics, active matrix liquid crystal display systems, avionics safety-certifiable subsystems, ASICs, and anti-tamper and cybersecurity software (via April 2025 acquisition of Star Lab from Wind River Systems). Products span chip-scale components through fully integrated processing solutions.

Customers and end markets

Primary customers are U.S. defense prime contractors and the U.S. government. In FY2025, RTX Corporation accounted for 13% of total net revenues, Lockheed Martin 10%, and U.S. Navy 10%. In FY2024, L3Harris accounted for 12%, Lockheed Martin 11%, and RTX Corporation 10%. End markets include C4I systems, sensors, electronic warfare, and aerospace communications.

Value-chain role

Subsystem and component supplier sitting between commercial semiconductor and electronics manufacturers and large defense prime contractors. In some cases designated as a directed source to primes by the U.S. government. Provides domestically designed, sourced, and manufactured electronics for programs where sole-source positions exist.

Geographic exposure

Primarily U.S.-focused, with domestic production facilities in Hudson NH, West Caldwell NJ, Oxnard CA, Alpharetta GA, Torrance CA, Upper Saddle River NJ, Gulf Breeze FL, and Norcross GA. International manufacturing in Plan-Les-Ouates, Switzerland was sold to Cicor Group in April 2025, with Cicor contracted to supply international operations for five years.

Source: SEC 10-K, filed 2025-08-11

Industry: Electronic Components & Accessories Peers: AEROJET ROCKETDYNE HOLDINGS, INC. AeroVironment Inc BWX Technologies Inc Eve Holding Inc Hexcel Corp Parsons Corp RTX Corp Rocket Lab Corp Spirit AeroSystems Holdings, Inc.